THE VALUE OF FINANCIAL PLANNING IN UNCERTAIN TIMES

I’m sure that many of you started 2024 with the ‘traditional’ glance at the past before looking forward and making plans. Many of these plans will have financial implications; whether it’s the purchase of a new home, the impending arrival of children or grandchildren, retirement, changing jobs, or simply your plans for making the most of the annual holiday allowance.

With 2024 now well underway, we face making these important decisions and plans for the upcoming year.

Have you ever considered working with a financial Planner when making these important decisions or do you go it alone? My own view is that with the help of a financial planner the chances of successful outcomes increase dramatically compared to taking the DIY approach.

By using a Financial planner you should end up being financially better off than you would have been had you not used one. It is not just about investment growth, although we all aim for that! It’s more about making sure that your plan has the right framework, is robust, practical and realistic and that you stick to it! As a gentleman called Andy Hart - Financial Adviser once said, "the best plan you can have is the plan that you stick to."

So why do people choose not to work with a financial planner?

Firstly cost plays a big part of it. You would be right to expect to pay for expert financial planning and the potential price can put people off. Of course the first thing to remember is that no good financial planner will make a recommendation based on what they can earn from it! My clients agree transparent up-front and ongoing fees at the outset and are fully aware of how I am remunerated and where those fees come from.

Whatever the issue, your adviser should be able to work with you to reach a solution you are happy with. However, even before you get to the stage of paying a fee, bear in mind that it is very rare to find a financial planner who isn’t prepared to offer you at least one meeting free of charge. This will allow them to establish the basics and give you an idea of the services they can offer which might provide a solution to your requirements. They will be able to give you an estimate of the cost at this stage.

Trust. Deciding to entrust personal information to a stranger can be hard. I’m the first to admit that the banks and Independent advisers have not covered themselves with glory over the years, and we continue to see the ripples of these institutional problems when we read the papers, local and national! The good news is that a (long overdue) raft of regulatory and procedural changes have gone a long way to resolve these issues and there is now a lot more protection in place for the consumer and there will be more coming down the line. With the introduction of the Consumer Duty recently in England I do not think it will be long before the JFSC adopts similar policies in Jersey.

Above all, remember that not all financial planners are built the same. The vast majority are just like you – honest, hard-working and conscientious, living with the same concerns as you, protecting their savings, funding their children’s education or caring for an ailing parent. They will understand the need to juggle finances and day to day responsibilities and will appreciate the value of time and money saved through the use of a well thought out plan and that all important second opinion.

So, do some research. Take the time to establish the credentials of your financial advisor/planner, ask about their qualifications, their experience and the structure of their business. Get to know them just as they will need to get to know you. If you just don’t feel confident then think twice about going ahead. If necessary, visit two or three planner/advisors before you make a decision.

Many of my clients are people I have know for years, and although I’m not saying you have to become best mates with your planner, the level of trust needed for an effective business relationship can only come through the development of a rapport.

So perhaps you are reading this as a DIY investor, ordinarily reliant on friends, family, Google and now of course Chat GPT for your financial planning advice . The experiences of others can certainly add to your research but if, when you are ill, you get professional advice from the doctor, why would you risk unprofessional advice when it comes to your money?

Your friends' opinions will have been formed by their own experience and their own agendas and although you’ll hear plenty of bragging about successes, very few are prepared to admit to their mistakes. Regardless of how much experience you have, a good financial planner can help you realise your goals by offering an impartial, professional take on your financial affairs.

Your Financial planner cannot predict the future. I certainly don't profess to know what the markets are going to do; I don't know which investment providers are going to provide the top returns over the next 20 years; and I don't know what dramatic events will occur in my clients' lives. What I can do is listen to the needs of my clients and help to guide them towards their goals and to think seriously, and realistically, about their future - what they want to achieve financially and personally, whether they are comfortable doing it, and by when. So next time you are sitting down to start making or updating your plans give me a call and involve me in the process.